Where may I find information about how long to keep financial and personal documents/records?
-Yolanda, Davie, Florida
Over the past few months we’ve received more than a few emails asking about what to keep and what to toss when it comes to financial documents. Luckily, I have a set of guidelines you can follow to avoid the piles of paper that seem to appear out of nowhere in even the most organized of homes:
Things you can get rid of right now:
Things you can get rid of in a month (or when you’ve reconciled your bill or bank statement):
Things to toss after one year (or when your end-of-year consolidated statements come in and your taxes have been filed):
Things to toss after seven years (or when you know you won’t need them any longer for taxes):
Things to keep as long as you own the asset:
Things to keep forever (in a safe or safe-deposit box, with a second copy in another safe, off-location premises):
I’m sure you have some questions. Are these things you’re tossing safe to go out with the trash? How do I organize the documents I’m saving?
When it comes to throwing out documents that might have your personal information on them, I recommend using a shredder. Crosscut shredders aren’t too expensive (about $100-$150) and will make it impossible for identity thieves to steal your information.
To keep organization simple, I use a system I call “Bills in a Box.” Essentially, “Bills in a Box” is a portable file folder box, filled with hanging file folders labeled with each of the following categories:
Within each hanging folder are manila folders for each subcategory. For example, in the “Auto” category, you might find separate folders for “Auto Insurance,” and “Lease Payments.” Once you’ve paid your taxes and taken care of all bills for the current year, simply put these files in storage and replace them for files for 2010.